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FTAA: Opportunity or Threat?

By Gabriel Leandro, MBA

Economist

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Even though there are many who resist the tendency towards integration and globalization of the economies, regardless of whether they are in favour or against, this process seems to be irreversible especially in the case of Costa Rican economy. In other words, this country is on a one way road where there is no choice to turn aside still less to turn back.

This situation can be assimilated as a threat because many productive sectors will be seriously affected and they will not be able to implement many of the policies that have been adopted to appeal investments and to encourage production. For example, tariff reduction that favours the introduction of new products leading to competition among foreign and national products and also the advantages that enterprises settled in free zones enjoy, as well as many other producers that may be affected by the new conditions.

Bu this situation may represent an opportunity, an opportunity to be competitive and to modify the way we think and the way we behave. We need to work on many aspects; some of the main are described below:

  • To take full advantage of the existent competitive and comparative qualities of this country and to develop new ones. For this reason it is essential to invest on education and training of Costa Rican population as well as on investigation and development, etc. It is also important to diversify the export offers and to differentiate the export products.
  • Innovation represents one of the main factors of competitiveness. Experts on that matter like Michael Porter assure so. It is necessary not only to innovate what is it produced but also how it is produced.
  • Added value and small sized enterprises. Productive chaining or in other words an increase in the added value of the export products is essential to reach a greater level of development in national economy. Alliances among national enterprises as well as subcontracting can also be encouraged and is precisely at this moment when small and medium sized enterprises must be taken into account.
  • The role of the state. The role of the state must change its traditional approach and to adopt a new one whose attention must be guide to two aspects: first, to assure honesty and efficiency of customs-houses, system of taxation, financial system, etc. and second, to provide infrastructure and basic services such as airports, highways, electrical energy, among many other services to promote development.
  • To accept the challenge. Finally the country must accept the challenge of competitiveness. This situation involves the whole population, the entire small and medium sized enterprises as well as the public sector.

We should be aware that all of us are involve in a trend, that all of us constitute Costa Rica and for that reason it is our responsibility. If the current and future events are opportunities or threats depends on us. I prefer to perceive them as opportunities. What do you prefer?

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